The company's counsel argued in the court that it was "malicious" and "malafide" petition which was causing loss to its business and reputation.

A bench of Chief Justice D N Patel and Justice C Hari Shankar heard the arguments on the petition for nearly two hours and listed it for further hearing on September 27.

The court was hearing the PIL filed by NGO 'Citizens Whistle Blower Forum' whose members include former Delhi High Court Chief Justice A P Shah, former Chief of Naval Staff Admiral L Ramdas, former IAS officer Aruna Roy and activist-lawyer Prashant Bhushan.

The NGO alleged that in the past many years, IBHFL has taken huge sums of loans from various public and private banks which means that public money is at stake, along with the money invested in IBHFL by its shareholders and investors.

The plea alleged that IBHFL, through its promoters and their various group firms and subsidiaries has been advancing dubious loans to companies owned by large corporate groups.

They, in turn, have been routing the money back into the accounts of companies owned by the promoters of Indiabulls, so as to increase their personal wealth, it alleged.

Senior advocate Mukul Rohatgi, appearing for Indiabulls, contended that this petition was copied from an earlier plea which was filed by one Abhay Yadav in the Supreme Court and was subsequently withdrawn and the facts stated in it were also wrong.

He said the petition, based on a letter of BJP leader Subramanian Swamy to Prime Minister Narendra Modi accusing Indiabulls group of misappropriation of funds, was wrong.

He said the petitioner has mentioned in the plea that concerned authorities have failed to take action against the company, so they have approached the court.

However, they have moved the court without giving any representation to any of the authorities.

Senior advocate A M Singhvi, also representing the company, said instead of a public interest litigation it was a "supari interest litigation".

The senior counsel said that he was not against the mechanism of PIL but this instant petition was "an unruly horse".

He claimed that Indiabulls Housing Finance is taking over Lakshmi Vilas Bank which is permissible under law and this merger is one of the reasons behind filing of this petition.

Even pendency of this petition is a threat to the wellbeing of the corporate firm, he said.

Senior advocate Jayant Bhushan, representing the NGO, said the facts stated in the petition are based on publicly available documents and it was not only based on Swamy's letter but independently on facts that they know.

Swamy has publicly released a letter he had sent in June to the prime minister, accuses the Indiabulls group of embezzling Rs 1 lakh crore from the National Housing Bank (NHB).

The counsel argued, "Rs one lakh crore of public money given to the company was being dealt with like this. It is the public which suffers in such matters."

During the hearing, the bench asked the petitioner's counsel as to why they have directly come to the high court and not approached the NHB.

"If you are putting allegations against someone, you should go before the concerned authority and if nothing happens, they you should come to the court," it said.

The PIL, filed through advocate Kamini Jaiswal, said the financial details of IBHFL, with details of borrowing show that over 12,000 companies are registered at the same address as that of Indiabulls thereby suggesting a staggering number of dummy companies having been created by Indiabulls.

The petition which was filed in the apex court had alleged that money amounting to thousands of crores was siphoned off by Sameer Gehlaut, the chairman of the firm, and the directors of IBHFL for their personal use.

The petitioner had alleged that Gehlaut, with the help of Harish Fabiani -- an NRI based in Spain, created multiple "shell companies" to which IBHFL loaned huge sums of money under "bogus and non-existent pretexts".

These companies further transferred the loan amount to other companies, which were either run, directed or operated by Gehlaut, his family members or other directors of Indiabulls, the plea had alleged.

The plea filed in the high court has sought direction to the Ministry of Corporate Affairs to conduct an investigation through the Serious Fraud Investigation Office (SFIO) into the irregularities into the financial affairs of Indiabulls and companies involved in transactions with it.

It has also sought direction to the Reserve Bank of India (RBI) and National Housing Bank (NHB) to investigate the financial affairs of IBHFL and to direct a special audit of IBHFL.

"The petitioner has further sought directions to the Ministry of Corporate Affairs, Registrar of Companies (ROC), SFIO, NHB, RBI, Securities and Exchange Board of India (SEBI) to take action against IBHFL and its promoters/owners," the plea said.